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Financial Times Notes the Financial Crash Looming

May 31, 2017 (EIRNS)—The London Financial Times on yesterday followed its Frankfurt-based competitor Handelsblatt of three weeks earlier, in publishing articles by bank researchers noting that a 2008-like debt crash may be near, triggered by an unrepayable U.S. corporate bubble. The article, by author Dombisa Moyo and financial editor Gillian Tett, is headlined "Global Debt Woes Are Building to a Tidal Wave." But it places most of the weight of danger on debt bubbles in the United States.

"U.S. companies have added $7.8 trillion of debt since 2010 and their ability to cover interest payments is at its weakest since 2008," the authors note—not getting into principal repayments. Both corporate and consumer debt have reached levels beyond those of 2008 not only in the United States, but also in the United Kingdom.

The authors say that

"The threat of a looming crisis is not solely down to the absolute volume of debts. At least three things make the situation especially precarious. First, debt— particularly dollar denominated—is becoming more expensive.... Second, the ability to repay debt is under strain in countries whose revenues stem disproportionately from commodities."

And finally, growth in the United States and Europe is very slow, and "any recession will cause a nasty shock to the system."